Why Mazda says hybrid SUVs are the sweet spot for the US market

Count Mazda among the automakers criticized for dabbling in electric cars, but the company is probably happy with it now.

Globally, Mazda reported record profits of 200.2 billion yen ($1.32 billion) for the first three quarters of its fiscal year, up 83% year-on-year, while global sales volume rose 17% to 930,000 units. The company forecasts “record results across all profit levels” when it reports full-year results following the quarter ending March 31.

While Mazda doesn’t currently offer a pure electric vehicle in the United States (it killed off the MX-30 EV that was only sold in California), the Japanese automaker plans to be fully electrified by 2030 — meaning 75% hybrid and 25% pure. electric vehicles.

For now, a conservative approach to relatively nimble Mazda is working in the US, as evidenced by the company’s best sales year in America since 1994. Tom Donnelly, CEO of Mazda North America, said Mazda’s transition plan was well-considered, even in light of a changing market.

“It’s undoubtedly a dynamic market at the moment, but all along we’ve had a strategy we call multi-solution, which means our plans have always revolved around hybrids and plug-in hybrids and ultimately electrification,” Donnelly said in an interview. with Yahoo Finance.

Donnelly notes that Mazda’s plan is a three-phase approach, starting with its flagship CX-90 plug-in hybrid SUV that debuted last year, the just-unveiled CX-70 plug-in hybrid (which is actually just a CX-90 with two rows). -90), and a new hybrid version of the CX-50 will arrive later this year.

Mazda CX-70

These three vehicles will accompany Mazda until 2030, when the brand will have exclusively electrified powertrains. “We believe the pace and our overall strategy are right for the current market,” Donnelly said.

While the company may be doing well here based on its initial hesitation in pure electric driving, Mazda has been criticized for moving too slowly towards electrification, and still lagging too far behind other mass market players such as GM, Ford and even Toyota as electrification peaks. a turning point in a few years. It’s not just purely electric vehicles either. Mazda is also a laggard in the field of hybrids.

GM, Ford and Toyota have committed billions to that transition, and while they may slow or limit some of it, the sheer size of those investments pales in comparison to what Mazda can spend on developing batteries and electric powertrains. Late last year, Mazda reiterated its plans to spend $10.7 billion on electrification efforts through 2030, while Toyota plans to spend $37 billion over the same period.

Donnelly refutes the criticism, claiming Mazda has been a ‘deliberate follower’ in the industry, an interesting turn of phrase as most companies want to be seen as ‘leaders’.

Mazda MX-30

“We want to time the market and ensure we introduce products, technologies and powertrains that the market demands, and we are clearly seeing a slowdown in BEV adoption. [but] we see an acceleration in demand for hybrids, and that’s why we think we’re timing the market right with the introduction of the two plug-ins we have this year, and the hybrid and CX-50 later this year,” he said.

Donnelly believes the mix of crossover utility vehicles combined with hybrid powertrains is the “sweet spot” for Mazda’s customers, who he says are largely affluent empty nesters who appreciate the driving dynamics of Mazda vehicles, which he believes is the power from Mazda.

It’s the idea that the smaller, punchier Mazda doesn’t have to be all things to all people, like Toyota or GM. It’s a playbook that even Ford has focused on: getting rid of mediocre cars and focusing on trucks, SUVs and sports cars like the Mustang: vehicles that appeal to their core audience.

“We had our best December ever in terms of retail sales, our best January ever in terms of retail sales,” Donnelly said. “We believe our strategy is suitable for the current market and also for the coming years.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him Tweet and further Instagram.

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